Posts pertinent to the entrepreneurial economy. From 2016 onward, focused more on private securities offering exemptions and topics related to startup and emerging company financing.

What Cloud Politics Mean for the Hosted Startup

Does a startup putting critical business processes into the cloud have to think about what happens when one or more cloud purveyors pull the plug?

Not DNS attacks or other failures outside the realms of competence and intention. Talking about deliberate, discretionary decisions to shut you down, whether because you've violated TOS, or because what you are doing causes the lords of the cloud to read their own TOS more closely as prelude to rewriting them -- perhaps even expressly for the purpose of making you violate them.

If you're a bootstrapped or thinly captialized startup, a claim for breach of contract may do you little good. Will your damages be provable, will you employ anyone by the time the claim is heard, will you ever regain the customers who meantime land elsewhere? ("Maybe," "maybe," and "no.")

The most egregious examples of customer dumping are politically charged: Amazon and Wikileaks; Flickr and an Egyptian activist.

If you stay out of politics, your sense of security may be well-founded.

And there is comfort in a crowded cloud. Established businesses that outsource their infrastructure want to know, not only that their applications and data are immune, but that similarly hosted applications and data of competitors and other businesses are equally immune. When a choice to be vulnerable is practiced by everyone, it's not negligence, it's an industry standard.

Meanwhile, in the halls of political power, legacy media businesses want to overturn existing law and make new laws that reverse existing norms and bypass judicial processes in favor of self policing.

Regressive efforts include Viacom's suit against Google. In Congress, legacy media powers were behind the "Combating Online Infringement and Counterfeits Act" in the last Congress. (Senator Ron Wyden of Oregon can be thanked for derailing that one. It would have created a safe harbor for big corporate vigilantisim.)

You are going to the cloud. You know you will. You don't have the choice. Nor do you really want the choice.

But policy matters!

The current trends nationally are regressive. Startup friendly policies would go the other direction and would include:

Innovations in common law, extending the doctrine of the public forum to ubiquitous web platforms that essentially function as utilities.

Extension of "net neutrality" thinking, from beyond ISPs (who resist the notion, to be sure sure), to include core cloud service providers.

Industry adoption of standards that would require takedowns to be "non-discriminatory." Only the biggest customers could insist on these, but they will need the help of technically savvy emerging companies to know what to bargain for.